What's going on?

Oatly floated on the US stock market on Thursday, and investors gave the plant-based milk maker a warm welcome: its share price immediately frothed up 30%.

What does this mean?

It�s no surprise Oatly�s newly public stock was in such high demand. Consumers� environmental and nutritional concerns have pushed plant-based products into the mainstream, and investors have long been looking for ways to back the companies fueling the category�s rise.

Their enthusiasm allowed Oatly to price its initial public offering (IPO) at the top end of its intended range, raising more than $1.4 billion in the process. The company plans to spend part of the proceeds on paying back a sustainability-linked loan, with the rest funding its ongoing expansion in the particularly fast-growing oat milk market � as well as the development of new products like plant-based cheese.

Why should I care?

For markets: Competition? What competition?
The IPO valued Oatly overall at $10 billion � a tidy step up from $2 billion just ten months ago (tweet this). That valuation amounts to 24x last year�s sales, compared to Beyond Meat�s 16x and Danone�s relatively paltry 2x (which might be because its two plant-based milk brands � Alpro and Silk � are just small cogs in a much bigger dairy machine). But even as new competition keeps coming onto the scene, Oatly�s ubiquitous brand means its growth is � at least for now � continuing to outstrip its rivals�.

The bigger picture: There�s even more room for plant-based milk to grow.
Oatly�s successful IPO came the day after website-hosting service Squarespace�s shares fell 13% on their own market debut. The difference might in part be down to a precedent set by Beyond Meat: the company�s stock price has risen more than 300% in the two years since it went public, despite a few ups and downs along the way. Investors, then, may well expect Oatly to be to plant-based dairy what Beyond Meat�s been to plant-based meat.